This post first appeared on Commercial Bankruptcy Investor. Visit them daily to get exclusive first reads of our daily posts of breaking bankruptcy news.
Through a highly-contested bankruptcy court-supervised asset sale process, Revel AC, Inc. reached agreement with Brookfield US Holdings LLC to sell substantially all of its assets. Those assets comprise the Revel hotel and casino complex in Atlantic City, New Jersey – a sleek 47-story, 710-foot high tower (the tallest building in the city) with 6.2 million square feet including a 130,000 square foot casino located on approximately 20 acres with 820 feet of boardwalk frontage. The sale, which was approved by the bankruptcy court in early October, contemplated Brookfield acquiring the resort for a small fraction of the cost of its development.
However, serious issues emerged on November 19, 2014, which was nine days prior to the outside date for closing the sale, when Brookfield informed Revel AC and announced publicly through a spokesperson that it was “walking away from the transaction.” Brookfield’s stated reason for deciding not to go through with the purchase was “because bondholders [of ACR Energy Partners LLC] refused to rework debt connected to construction of Revel’s power plant[.]” Court filings today disclosed that on November 29, 2014, Revel AC “notified Brookfield that pursuant to Sections 11.2(c) and 11.2(h) of the Brookfield APA, the Debtors had the right to terminate the Brookfield APA, and consequently, pursuant to Section 2.6(b) of the Brookfield APA and Section 7 of the Modified Bid Procedures (as defined below), retain the Brookfield Deposit.” Further, on Tuesday (December 9th), Revel AC “delivered a prospective notice of termination . . . of the Brookfield APA to Brookfield in accordance with the terms of the Brookfield APA.” That Termination Notice goes into effect at 5:00 p.m. (Prevailing Eastern Time) on December 12, 2014.
After business hours on Tuesday, Revel AC filed a motion with the New Jersey bankruptcy court seeking an order providing two elements of relief:
- approving Revel AC’s decision to terminate the asset purchase agreement with Brookfield and
- scheduling a hearing on entry of an order approving the sale of substantially all of the Debtors’ assets to the back-up bidder, Polo North Country Club, Inc. pursuant to the asset purchase agreement with Polo North.
Revel AC is also seeking to have the motion heard on shortened notice, with a hearing proposed for December 12, 2014 at 10 a.m. (Eastern). A copy of the motion can be downloaded by clicking here. The motion attaches copies of both the November 29th and December 9th notices from Revel AC to Brookfield. It also attaches a copy of the proposed alternate asset purchase agreement with Polo North.